Original Research Paper

The Phenomenon of Capital Flight in Third World Countries: Evidence From Selected Oil Firms in Nigeria

Iyeli, I. Iyeli, Ph.D1
Ayadu, E. Kofie2

1Department of Economics, University of Calabar2Federal Inland Revenue Service Port Harcourt - Nigeria

*Corresponding Author E-mail: rexiyeli@yahoo.com

Accepted 1st August, 2016

Abstract

This paper on the phenomenon of capital flight in the Nigerian economy, investigate how the financial resources of the economy are constantly transferred out to foreign economies. The research probes into the financial operation of multinational oil companies and their contribution to the general growth of the Nigerian economy. This research became quite necessary on grounds that Nigeria being the 9th largest producers of crude oil with billions of dollars in foreign earnings is classified among the poorest countries of the world. This study is descriptive and empirical in nature and is carried out on some selected oil firms. Tables, charts, and percentage are used to analyze the financial data obtained from both primary and secondary sources. Descriptive tools are preferred to inferential tools given the nature of the problem being investigated. The research has led to the discovery of the fact that 82% of the total wealth created from the Nigerian oil sector is paid into foreign accounts while only 18% is paid within the domestic economy. This 82% of the total wealth created within the economy constitute capital flight from the economy. To reverse this trend, the government needs to reappraise its market-driven economic policies to reflect the realities on the ground. Multinational oil companies should be made to realize the need to retain some of their wealth within the economy.